LONDON (Alliance News) - Oil major Royal Dutch Shell PLC on Thursday reported a drop in first quarter earnings due to lower oil prices and production in most of its segments.
Shell also launched the next tranche of its share buyback programme, with the maximum consideration to be USD2.75 billion for the period up to July 29. The maximum amount of shares that can be bought back by Shell is 618.3 million.
For the three months to the end of March, current cost of supply earnings, excluding items, declined by 2% year-on-year to USD5.43 billion from GBP5.52 billion. CCS earnings attributable to shareholders, excluding items, also fell by 2% to USD5.30 billion, while including items it dropped by 7% to USD5.29 billion.
The identified items mainly include impairments, changes in the fair value of commodity derivatives and tax credits.
Total first quarter production available for sale decreased by 2% to 3.75 million barrels from 3.83 million the year before, and from 3.79 million in the final quarter of 2018.
Revenue for the period fell to USD83.74 billion from USD89.23 billion the prior year, however, pretax profit increased to USD9.40 billion from USD6.03 billion.
Shell will pay a first quarter dividend of 47 US cents per share, in line with the year before.
Integrated Gas saw earnings, excluding items, rising by 5% to USD2.57 billion from USD2.44 billion the year before. However, production fell by 12% to 851 barrels of oil equivalent per day from 972 barrels.
Looking ahead, Shell expects second quarter Integrated Gas production to decrease by 10,000 to 50,000 barrels of oil equivalent per day compared to the year before, due to divestment and the transfer of the Slaym asset to the Upstream segment.
Upstream first quarter earnings rose 11% to USD1.73 billion from USD1.55 billion the prior year, as production available for sale edged up by 1% to 2.90 million barrels per day from 2.86 million.
Upstream production for the second quarter has been guided to increase by 150,000 to 200,000 barrels of oil equivalent per day year-on-year.
Shell's Downstream business earnings excluding items rose by 3% to USD1.82 billion from USD1.77 billion. However, oil sales volumes fell by 5% to 6.46 million barrels a day and Chemicals sales volumes by 8% to 4.13 million barrels.
For the second quarter, oil sales volumes are expected to decrease by 40,000 to 70,000 barrels from the year before, due to Shell's divestment in Argentina.
"Shell has made a strong start to 2019, with the first quarter financial performance demonstrating the strength of our strategy and the quality of our portfolio of assets. The power of our brand, serving millions of customers every day, continues to be a differentiator. Our integrated value chain enabled our Downstream business to deliver robust results despite challenging market conditions," said Chief Executive Officer Ben van Beurden.
